As we head into the dreary remainder of winter, a few lucky readers and their families might just have a vacation somewhere warm in the works. Even better still, some of them have a family vacation home to visit.
On the other hand, perhaps you’re stuck in the snow and dreaming of the upcoming summer trip to your getaway place. Regardless where you find yourself, if you have a vacation home for your family to cherish, then I have a question for you: How will you leave your vacation home to your family?
Bequeathing vacation homes is often an important after-thought when it comes to most estate plans. How about yours? Typically, such real estate is wrapped in memories, but when it comes to dollars and cents, the vacation home is overshadowed by the family home itself.
The Wall Street Journal recently published an article on the topic to remind us of the importance of this issue, the possibilities, and the problems that can arise.
The central point in planning, whether for a vacation home or other matter, is to know your family and the available estate planning options. In all likelihood, the vacation home is not an asset you would want to give to just one child, especially if it was where everyone spent their summers together. Is giving the home to one person the same as giving it to everyone? Perhaps not.
Maybe you need to think even bigger and consider multiple generations by moving the home, not to a person, but to an entity like a Limited Liability Company (LLC) or a trust. A particularly powerful tool to bear in mind, in the right circumstances, is the Qualified Personal Residence Trust (QPRT).
There are, of course, a number of practical considerations to make – like, can so-and-so take care of the home and will so-and-so be living too far away to make use of it?
For a few more ideas you can take a look at the original article. In the end, whether your vacation plans are for escaping the snow now or waiting until summer, it’s important to start thinking about your estate plans for your vacation home sooner rather than later.
Reference: The Wall Street Journal (January 7, 2012) “Who Gets The Vacation Home?”
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